Sunday, November 24, 2013

Pav-Saver Corporation v. Vasso Corporation case brief

Plaintiff corporation filed an action
against defendant attorney for dissolution of a partnership agreement
and return of its patents and trademark. The attorney counterclaimed
for wrongful termination. The corporation and the attorney sought
review of the order of the Circuit Court of Rock Island County
(Illinois), which awarded the corporation its interest in the
partnership and awarded the attorney liquidated damages for wrongful
termination.

CASE FACTSCorporation was the owner of a
trademark and patents for the design and marketing of concrete paving
machines. The corporation formed a partnership with an attorney for
the manufacture and sale of the machines. The corporation sought to
terminate the partnership and filed an action for a court-ordered
dissolution, return of its patents and trademark, and an accounting.

DISCUSSION and HOLDING

The court held:

1) that the partnership agreement contemplated a
permanent partnership, terminable only upon mutual approval;

2) that
the corporation's unilateral termination violated the agreement;

3)
upon the corporation's notice terminating the partnership, the
attorney was entitled to continue the business pursuant to Ill. Rev.
Stat. ch. 106 1/2, para. 38(2)(b);

4) that the trial court did not
err in refusing to return the patents and trademark to the
corporation or assigning a good-will value;

5) that the amount of the
liquidated damages was not unreasonable and was a legitimate matter
bargained for between the parties; and

6) that the liquidated damages
payout formula was enforceable and the doctrine of equitable setoff
did not apply.

CONCLUSION
The court affirmed the judgment of the trial court, which awarded
the corporation its interest in the partnership and awarded the
attorney liquidated damages.Recommended Supplements for Corporations and Business Associations Law

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